Nintendo Wii Wins

Microsoft (MSFT) should consider closing its money losing video game division. According to the FT, Nintendo’s Wii has now outsold Xbox 360 even though its has been on the market a year less.

Data from Enterbrain and NPD Group "sales data from each console’s launch through to the end of July (or the end of August in Japan), consumers have bought 9 million Wiis, 8.9 million Xbox units and 3.7 million PS3s."

Microsoft lost $1.9 billion in its device division in the last fiscal year. Revenue was $6.1 billion. It could buy Ninetendo for $50 billion and have a real business. Microsoft could pay about half in cash, so the dilution to its share holders would be less than 10% if the other half were paid in stock.

It might work. It is better than losing $2 billion a year for the next 25 years.

Douglas A. McIntyre

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